Where the Growth Is

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BOARD MEMBER’S MEMOIndependent Publisherby Kelly GallagherAs the publishing industry continues to go through tectonicchanges, overall unit sales continue to grow, but overall revenuenumbers are not doing as well.According to BookStats (a collaborative effort by the BookIndustry Study Group and the Association of American Publishers),net unit sales grew by about 12 percent industrywideover the four-year period from 2008 to 2011, reachingjust under 2.8 billion units. This growth is largely a result ofthe exponential growth of e-book sales.Collectively, your segmentsof the industry are making asignificant contribution to thepublishing community.Net dollar sales, on the other hand, managed to squeeze outonly 2.9 percent growth over that same four-year period, finishing2011 at $27.2 billion. And overall net dollar sales actuallydeclined from 2010 to 2011, by $700 million. Accordingto early reports on 2012, the trend is continuing.How do these numbers relate to the independent publishersegments of the industry? For smaller publishers, the Book-Stats numbers paint a very different and quite positive picture,so positive that you can convincingly conclude that weconstitute the industry’s healthiest and fastest-growing segment.Smaller Publishers, Bigger GainsDuring the past four years, from 2008 to 2011, publisherswith annual net sales between $500,000 and $5 milliongrew unit sales by more than 25 percent, double the industrygrowth rate. And publishers with less than $500,000 inannual net sales also far exceeded the industry average, growingunit sales by nearly 23 percent in the same four-year span.Revenue growth for each of these two publishing segmentsis even more impressive. Publishers netting $500,000 to$28.028.027.527.026.526.0Publishing Industry – Net SalesAnd 4-Year Growth Rate in Billions of Dollars+ 2.9%2.82.72.62.52.4Publishing Industry – Net Volume in Billions of UnitsAnd 4-Year Growth Rate of Unit Sales+12.2%25.52008 2009 2010 2011Source: 2012 BookStats2.32008 2009 2010 2011Source: 2012 BookStats10 | IBPA Independent | February 2013
Independent Publishers■$5 million annually grew at five times the industry average,at a rate of over 15 percent, while publishers netting less than$500,000 annually grew at four times the industry average, ata rate just under 13 percent.It could be argued that these two publishing segments—thesegments that include IBPA members—were responsible forthe overall marginal industry growth.You can convincinglyconclude that we constitutethe industry’s healthiest andfastest-growing segment.Causes for CelebrationOften the press of day-to-day operations can leave you feelingas if you are on your own, fighting an uphill battle to make,and make known, the titles you work tirelessly to produce. Ibelieve it is important for IBPA members to know two veryimportant things as we celebrate these numbers.Collectively, your segments of the industry are making1 a significant contribution to the publishing communityin the United States. At this moment, they are the only onesshowing significant growth in all categories, revenue, units,and population.This means that not only is there a place for publishers ofyour shape and size, but you are helping the industry continueto grow.The independent publisher segments are also impressive interms of the industry’s total value. In 2011, publishers withannual net sales of less than $500,000 contributed nearly ahalf billion dollars, while publishers with annual net salesbetween $500,000 and $5 million contributed just under$1.7 billion, for a combined total of $2.2 billion.It is a little tricky to estimate how many publishers there arein these segments. But we do know for sure that smaller publishers—definedas those publishing fewer than 10 ISBNs ayear—are multiplying quickly. A recent study published byR.R. Bowker estimated the growth rate from 2006 to 2011at over 69 percent, and noted that this group of publishersnow numbers nearly 21, 000, excluding companies such asSmashwords and those who publish through them.2520151050Small Publishers in Thousands(
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Where the Growth Is

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